Job Dynamics

Here is a common dilemma:

You have been in a job with a career structure for a while.  Now you have decided that you want promotion.  Attaining promotion can be done both by applying internally within your current organization and externally to others.  To some extent those others are rivals, but the degree of rivalry depends on the kind of market you inhabit.

An internal and an external opportunity present themselves at the same time, and you apply for both.  The external company then shortlist you for interview. Should you inform your current boss?  If so, when should this happen - immediately or only if you receive an offer?

The answer to this will depend on many factors.  For example, it may be that a change of scene is also desired, in which case you may well play the game to the end and only when offered let your boss know.  In this way you can find out if she will improve your situation sufficiently to outweigh the costs of moving to a new company, and the benefits the new company are offering.

Another factor in resolving this is whether or not you see yourself as an asset.   It is also important to know if your view is shared by your current company.  If the external opportunity leads to shortlisting you can reasonably assume that they regard you as a potential asset.  But you cannot safely infer from this that your current employer thinks of you in the same way.  It is in your best interests to treat your current and potential employers as logically separate entities, even if you have information about rivalry between them.  A significant competitive element suggests a hard fought for market share, but there are many ways to win the majority option.

Your current employer, knowing that you want promotion, will clearly assess your worth relative to her plans and ambitions.  But, she will also see your application as a request for more of her resources.  She will have to decide whether or not giving you more resource, in terms of money and perhaps other liberties, will truly maximize utilities - in short, will she get a lot more from you than she currently is, should she promote you? Moreover, she may conclude that she should be getting more from you in your current position.  Where you might feel like an asset, and this has emboldened you to apply, others see you as a cost.

If both you and your boss interpret your worth as an asset then letting her know about an external shortlisting presents the possibility of loss for her and the company.  This might act to bias decisions in favour of your promotion.  But if she sees you as cost then news of your shortlisting may well bias her in the other direction, in an attempt to recoup losses upon your departure.  If her view is neutral she may see an opportunity to fill your role with a less-experienced and cheaper hire.

Another point to consider is the loyalty culture within your company.  Even if you are seen as the most important asset it is possible that an external application is seen as a desire to defect, or minimally as an expression of doubt about current circumstances.  This could be detrimental and introduce negative biases into your boss's calculations.

Given the above it would seem that silence until a concrete external offer is made is the best policy.  This would appear to be especially so where information about your boss's thinking and the loyalty structure are unavailable or uncertain; or where you are certain you are not seen as an asset and/or would be thought disloyal.

However, knowing your status as an asset is useful.  It can help you decide about moving on.  It can help you to determine whether your investment in a company will be repaid and  help you to grow interesting projects.  Many companies are informationally opaque on such matters as your worth. To a large extent it is wise to be so, for open information that would allow social comparisons and hierarchies to emerge would be managerially problematic; not least because such information would appear to be officially endorsed.  So where social interpretation cannot be meaningfully constrained, no information is better.  This is one reason why promotional procedures are informationally asymmetric - it is very clear what one has to provide to the promotion panel, but often extremely unclear how that material is processed and a decision reached.  If these processes were transparent managers would have a glut of applications for promotion that they could not reasonably deny and they would go bankrupt.  (This is a clunky solution, though, because the process instils hope and generates much disappointment which in turn presents other managerial problems.)

In spite of these asymmetries, providing information to your current employer upon shortlisting can yield the basic data you require in return.  Whilst you may not be privy to the decision making algorithms, it is the outcome you are most interested in.  If your employer wishes you luck in the forthcoming interview, and proffers nothing else, you can assume you are not a key asset with reasonable certainty.  If the news is swiftly fed up the chain, and you are reminded that your application is being considered internally, then you have reason to think you may be well-regarded. There are, of course, many variants on these signals, and they can become quite subtle for a number of local ecological reasons.

Assaying your worth in this way does require a certain boldness - you do not always hear what you should like - and it also requires an understanding of what will happen should your internal and external applications fail.  Most people would understand that you have given a signal of intent to leave, and disinvestment in the company.  Moreover, your boss will be less likely to afford you opportunities to pursue new initiatives etc. that may help to advance your career.  If you wish to solve this, then longer term social solutions are required, and that will mean taking on visible costs in order to signal your renewed loyalty.  All told, you can easily make a rod for your own back.  The degree to which you suffer this will depend upon your peer esteem across the company.  If well embedded then colleagues will understand your motivations, and indeed may be sorry for you.  But you require information in this situation too, and that is not always readily attainable.

The machinations related above really only skim the surface, and there is much complexity to be unravelled here, and more formally so in game theoretic terms.  However, the key point is that job applications are not solely about new opportunities, they are also a means to analysis and can lead to significant changes.  For example, if both the internal and external options are denied, and you move into a disinvested mode of operation at your workplace you are very likely to begin asking why you work in that industry at all - is there something totally different and more inspiring to do with your life?